Rauner compares tax hike to 'two-by-four' as veto override vote is set

Gov. Bruce Rauner on July 5, 2017, warned lawmakers not to override him and said he would do “everything possible” to try to make sure they don’t. Rauner had invited news cameras to a tavern in Chicago’s Hegewisch neighborhood, where he was joined by local businesspeople who complained about high property taxes. (Abel Uribe / Chicago Tribune)

Gov. Bruce Rauner on July 5, 2017, warned lawmakers not to override him and said he would do “everything possible” to try to make sure they don’t. Rauner had invited news cameras to a tavern in Chicago’s Hegewisch neighborhood, where he was joined by local businesspeople who complained about high property taxes. (Abel Uribe / Chicago Tribune)

Comparing the state income tax hike he'd vetoed a day earlier to a "two-by-four smacked across the forehead," Gov. Bruce Rauner on Wednesday warned lawmakers not to override him and said he would do "everything possible" to try to make sure they don't.

That admonishment soon could be put to the test, as Democratic House Speaker Michael Madigan announced plans to attempt the override Thursday afternoon. But it's an open question whether enough lawmakers will be on hand, given that only half the House showed up the last two days.

The Republican governor's comments came after a flurry of activity at the Capitol over the long holiday weekend that saw 16 Republicans join Democrats to approve an income tax increase and a budget aimed at ending a stalemate now in its third year.

The rush was spurred in part by pressure from Wall Street agencies that warned Illinois could become the first state in the nation to see its credit rating dropped to junk status if a deal wasn't reached.

Despite the movement toward a resolution in Springfield, Moody's Investors Service indicated Wednesday that even overriding Rauner's budget vetoes might not be enough to prevent a downgrade. The agency cited the state's "most pressing credit challenges": a $15 billion backlog of unpaid bills and a shortfall in government employee pensions systems that the state has pegged at $130 billion.

The governor showed little public concern about the threats from ratings agencies, telling reporters Wednesday, "Don't listen to Wall Street."

Rauner had invited news cameras to a tavern in Chicago's Hegewisch neighborhood, where he was joined by local businesspeople who complained about high property taxes. Rauner took the opportunity to rail against Madigan "and his subordinates" for "using leverage of suffering" to raise taxes.

The tax hike would take effect retroactively on July 1, the start of the budget year. (July 5, 2017) (Sign up for our free video newsletter here http://bit.ly/2n6VKPR)

The tax hike would take effect retroactively on July 1, the start of the budget year. (July 5, 2017) (Sign up for our free video newsletter here http://bit.ly/2n6VKPR)

"If they were just going to do a tax hike with no reforms, they could have done that two years ago," the governor said. "Instead they caused a crisis and they hurt innocent people. This is wrong. This is broken politics."

"Crisis creates opportunity," he said then. "Crisis creates leverage to change ... and we've got to use that leverage of the crisis to force structural change."

Now, state government is two years into a record budget impasse that has universities on the brink of losing their accreditation, many social service nonprofits too broke to serve the needy and roadwork at a standstill. Without a budget deal by mid-August, many elementary and high schools will have to scrape the barrel of their reserves in order to be able to open their doors for the new school year.

The budget plan that Rauner vetoed would have the state spend more than $36 billion on primary and secondary education, colleges and universities, social services, medical care for the poor and other government functions, with nearly $5 billion in new taxes to help pay for it. The personal income tax rate would rise from 3.75 percent to 4.95 percent. The corporate tax rate would go from 5.25 percent to 7 percent. The plan also would have the state pay down about half of the nearly $15 billion pile of unpaid bills through a combination of borrowing and using cash from other state accounts.

Rauner has said repeatedly in the past that he would support a tax hike as part of balancing the budget, but only if it came with other items on his legislative wish list. Democrats sent the governor multiple bills they contend address those items, but he says they're watered down and not enough to get him on board for the tax hike.

On Wednesday. Rauner blamed the situation on "a continuing failure by elected officials in Springfield on both sides of the aisle that has been led by Speaker Madigan for 35 years."

He said his team was "doing everything that we can do to push to ensure my veto is not overridden," though he didn't say what specifically he was doing in the day before a potential vote.

In the last election cycle, outside groups aligned with the governor helped finance a primary challenge to a state senator who had cast some votes in defiance of Rauner. The senator held onto his seat, but the expensive campaign was seen as a warning to other Republicans not to cross the governor, who has shown a willingness to dig deep into his pockets to fund political causes.

That loyalty has started to fray amid pressure caused by the budget stalemate. In the House, 15 Republicans joined Democrats to help get the budget legislation over the 71-vote threshold required to pass such legislation after May. That's the same threshold needed to override a veto. In the Senate, one Republican voted for the tax and spending bills, as well as the override, which was completed in that chamber on Tuesday.

Now the ball is in the House's court. In recent days, low attendance at the statehouse has made it impossible for lawmakers to complete any business at all, much less a veto override. On Wednesday, just 59 of the chamber's 118 lawmakers showed up to work.

For Rauner, an override of his budget veto could be politically beneficial in two ways. It breaks the budget impasse, allowing state spending to return closer to normal and relieves some pressure, even if it wouldn't repair all the damage done during the stalemate. And as Rauner seeks re-election next year, he could campaign in the suburbs and Downstate saying that Madigan's power and that of the "Chicago Machine" thwarted the veto and that they increased taxes on the entire state to bail out the city. Rauner regularly plays geographic politics against Chicago.

Already, Rauner is showing signs of employing that strategy. On Wednesday, he cast himself as being outright opposed to raising taxes, despite having said in the past that fixing the state's financial problems will require a mix of spending cuts and new revenue.

"This tax hike is not right for the people of Illinois," the governor said. "More taxes will not solve our problems."

Still, if lawmakers override him, Rauner would not be able to say he actually blocked a tax hike, only that he strongly opposed it. That could be cold comfort to taxpayers forking over more of their paychecks to a deeply dysfunctional state government and looking for results instead of rhetoric.

If the override fails in the House, Rauner gets to say he blocked a tax increase, but Madigan is likely to blame Rauner for the budget deal falling apart and suggesting it is now the governor's turn to fix the problem. Democrats could point to Rauner and his veto as leading Illinois to junk-bond status and an inability to borrow, the failure of schools to open, the potential closing of public colleges and universities, the closing of more social service providers, the shutdown of economy-stimulating road construction projects and the continued exile of the state from Powerball and Mega Millions lottery games.

Under that scenario, Democrats would be waiting for Rauner to come to them.

Madigan already has suggested Rauner will try to derail the override in the House.

"If you've followed the methods of the Rauner administration for two and a half years, I would expect that they'll be back at work, just as they have for two and a half years," Madigan said Monday, accusing the governor and his staff of intimidation tactics against Republicans. "I don't use pressure. We would work for the override. We would work for the override just as we worked for passage of the bill in the initial passage stage."

For many of the Republicans who joined with Democrats on Sunday, the backlash has been fierce as outside groups have blanketed social media with attacks. Some lawmakers have had their personal phone numbers posted online, resulting in hundreds of angry calls from those opposed to the tax increase, which have in some cases included threats of violence.

Rep. Sara Wojcicki Jimenez, a Republican whose district includes Springfield, said she has not heard from Rauner's office since voting in favor of the budget. She said that while much focus has been put on the tax portion of the package, the spending side included real cuts and across-the-board reductions that Republicans have long pushed for. She said she plans to vote for the override.

"I will never be able to convince anybody to say to me, 'Wow, Sara, you've really convinced me. I am happy to give the state more money,'" Wojcicki Jimenez said. "Happy will never be the emotion. I hope that the emotion becomes, the more you talk about it is understanding of what the math is and what the dynamics of the legislature is."

She added that just because some Republicans differed from Rauner on the budget plan isn't a sign of diminished support for the governor on other efforts, including pushing for further changes to workers' compensation laws. But she said she had to take immediate action to help her community that has been devastated as universities and hospitals aren't being paid and uncertainty has seen people pick up and leave.

"I continue to say to some of my Republican friends that one of our primary principles is financial responsibility," she said. "Having a budget and paying your bills. Those are a couple things that haven't been occurring over the last couple years. So we have got to own up to that and try to move forward."

Rep. Steve Andersson, R-Geneva, said he plans to support the override effort, saying that "no facts have changed" when it comes to the dire circumstances facing Illinois if a budget isn't put in place. He was among those whose cellphone number was published online shortly before he cast his yes vote for the budget package.

Andersson said he felt the vote was the responsible thing to do, evidenced by the fact that ratings agencies haven't yet issued a downgrade.

"They have affirmed that this was the right vote to take," Andersson said. "So even though (people) are outraged now, the reality is if we had not done what we did, the end game would have been worse and it would have been decades — decades — of recovery."

Rauner offered a different take of the situation Wednesday, insisting that scoldings from New York should be ignored.

"We've got to have families, homeowners, small business owners, have got to be first," Rauner said. "Don't listen to Wall Street, don't listen to a bunch of politicians who want power and stay in power like they have been for 35 years. Listen to the people of Illinois. The people of Illinois don't want more taxes on their lives."

Madigan, in a statement announcing his plans to attempt an override Thursday, said, "House Democrats look forward to working with our colleagues on the other side of the aisle to begin healing the wounds of the last several years."